ARA US Hospitality Trust (ARA H-Reit) has priced its initial public offering (IPO) at 88 US cents per stapled security.
The IPO comprises 379.8 million stapled securities subject to the over-allotment option, made up of an international placement of 328.6 million to investors outside the United States and 51.1 million to the public in Singapore. Six cornerstone investors have also taken up 132.4 million securities.
ARA H-Reit expects to raise gross proceeds of US$498 million (S$678 million) from the offering, including nearly US$163.8 million from the issuance of cornerstone and sponsor subscription stapled securities. It is also expected to draw on about US$251.8 million of debt facilities by the listing date.
About US$715.2 million of that combined US$749.8 million will go to redemption proceeds and debt repayment, US$28 million for transaction costs, and US$6.5 million for working capital.
The expected distribution yield is 8 per cent from May 1 to Dec 31 this year, and 8.2 per cent for the projection year 2020.
The public offer opened at 9pm last night and closes at noon on May 7, with trading expected to begin at 2pm on May 9.
This will be the Singapore bourse's first hospitality trust focused purely on the US market. The portfolio has a total appraised value of US$719.5 million, comprising 38 upscale select-service hotels with 4,950 rooms in all.